Production in India Expands; Ambanis Reconcile

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
24 May, 2010
New York City

Mumbai stocks traded higher after industrial production index increased in March and in the fiscal year ending in the month. Ambani brothers agree to cooperate to resolve natural gas distribution dispute. Standard Chartered Plc is scheduled to launch its public offering.

[R]6:00 PM Mumbai, 8:30 AM New York – Mumbai stocks traded higher after industrial production index increased in March and in the fiscal year ending in the month. Ambani brothers agree to cooperate to resolve natural gas distribution dispute. Standard Chartered Plc is scheduled to launch its public offering.[/R]

Stocks in Mumbai traded higher after industrial production surged in March and in the fiscal year ending in the month, Ambani brothers agree to cooperate and Standard Chartered Plc is scheduled to launch its offering tomorrow.

Rupee edged lower 12 paisa to Rs. 47.25 against one dollar.

The Sensex index in India increased 23.94 or 0.15% to 16,469.55 and CNX Nifty index rose 38.80 or 0.79% to 4969.95. Among the Sensex 30 stocks, 14 rose and 16 fell.

On BSE trading, 1,947 stocks advanced, 809 declined and 81 were unchanged. Banking stocks reversed initial gains. Index heavyweight Reliance Industries pared initial gains.

The UK based lender Standard Chartered Plc expects to raise between $500 million and $750 million in its first offer of Indian Depository Receipts between May 25 and May 28 that may be priced between Rs 110 to Rs 115 each.

The sale is managed by Goldman Sachs, UBS AG, JM Financial Services Ltd., Bank of America Corp.’s Merrill Lynch & Co, SBI Capital Markets Ltd., Kotak Mahindra Capital Co, and Standard Chartered-STCI Capital Markets Ltd.

Anchor investors will be allowed to bid for the securities according to the sale document issued by the company.

Industrial output measured by the Index of Industrial Production grew by 13.5% in March over the previous year. The index increased 16.7% in January and 15.1% in February and for the year ending in March increased 10.4% compared to 2.8% in the previous year.

With the surge in production, the GDP growth is expected to exceed the government estimate of 7.2%.

Industrial Development Bank of India has launched open-ended equity index fund based on NIFTY index that includes 50 stocks on the NSE. The index fund will close on May 31.

Shares of Mukesh Ambani''s Reliance Industries and Anil Ambani group companies jumped after the brothers ended non-compete agreements in a move they hoped would lead to cooperation between the two groups.

Cabinet Secretary K.M. Chandrasekhar on Monday said the revenues from the third-generation wireless spectrum auction, which concluded last week, will bring down fiscal deficit and cut the government''s borrowing plans.

Prime Minister Manmohan Singh on Monday said inflation is showing signs of moderating and the government expects to achieve a medium term target of 10% GDP growth annually.

Citigroup Inc raised its target for the Sensex to reach 18100 by the end of this year. Analyst Aditya Narain assigned ‘overweight’ recommendation to financials, capital goods, energy and automobile sectors.

Gainers & Losers

Astral Poly Technik Limited fell 0.04% to Rs 223.05 after the company''s board recommended a 2-for-1 stock split and released fourth quarter March 2010 results.

Bharat Forge Limited rose 0.8% to Rs 262.90 after the company received a contract to design and commission a 450 megawatt independent power project.

Educomp Solutions Limited rose 1.0% to Rs 490.00 on bargain hunting after the stock corrected 23% in the preceding six trading sessions.

The Great Eastern Shipping Company Ltd gained 3.7% to Rs 285.35 after the company reported fourth quarter net profit rose 24.1% to Rs 155.73 crore.

Godrej Consumer Products Limited rose 0.4% to Rs 322.00 after the company said it will acquire Latin America-based Issue Group, a market leader in hair colors in several countries in the region.

KIC Metaliks Limited rose 4.9% to Rs 114.05 after the company reported fourth quarter net profit of Rs 9.41 crore compared to net loss of Rs 11.82 crore.

Marsons Limited increased 4.7% to Rs 18.70 after the company entered into strategic agreement for acquisition of 100% equity in a European company manufacturing power transformers up to 132 KV Class for £6.1 million.

Madhucon Projects Limited climbed 4.2% to Rs 149.00 after the company secured an order for 64 km road construction from National Highway Authority of India annuity project in Bihar.

REI Agro Limited advanced 2.8% to Rs 41.00 on the hopes of right issue announcement at a meeting scheduled on May 26.

Redington (India) Limited rose 0.8% to Rs 381.50 after the company''s board recommended a 5-for-1 stock split and released fourth quarter March 2010 results.

Varun Shipping Company Limited fell 1.4% to Rs 44.70 after the company reported full-year sales decreased to Rs 896.7 crore from Rs 942 crore a year ago. Net profit in the year declined to Rs 12.5 crore compared to net profit of Rs 122 crore a year ago.

Whirlpool of India Limited rose 0.9% to Rs 261.50 since the company plans to hike product prices by 2% to 3% in the next 2 months.